The State Society of Industrial Participations (SEPI) confirmed yesterday that "it is carrying out an internal exploratory analysis regarding the eventual acquisition of a shareholding in Telefónica". A leaked statement sent to the National Securities Market Commission (CNMV) confirming that the State could buy 5% of the capital of the country's main telecommunications operator and re-enter its capital after its privatization in 1999.
Government sources explain this interest because they consider that Telefónica is a "strategic company due to its important role in the field of telecommunications and defence". The claim to maintain a strong core of national shareholders fits into this objective. At the moment, BBVA leads the shareholding, with 4.87%. At a further distance is CaixaBank, with 3.5%.
BBVA distanced itself yesterday from the possibility of strengthening the Spanish core of Telefónica, stating that it does not rule out selling its stake. "We are not considering increasing our shares at all," said CEO Onur Genç. The entity does not consider this financial position to be strategic and is available for sale.
The final word on a possible state investment in Telefónica therefore goes to SEPI, dependent on the Treasury, according to market sources. One of the vehicles that the State could use to strengthen this Spanish nucleus is Indra, the company in which the State holds a 27.99% stake and with other national shareholders such as SAPA and Escrivà, specialized in defense and technology which in some aspects is a competitor of Telefónica.
Yesterday, analysts asked the president of Indra, Marc Murtra, if the company would be interested in investing in Telefónica. He replied that the company takes its investments "very seriously" and does not comment on "speculation". However, government sources say that the possibility of Indra being part of a share operation in Telefónica is not ruled out.
The main problem for a State entry would be financial. 5% of Telefónica at market price is close to 1,000 million, which should come from public coffers. It means, more or less, what has been left in to credit the VAT on the electricity receipt for one year.
Sumar is in favor of the State participating in strategic sectors. Yolanda Díaz supports, therefore, a possible operation in Telefónica.
The Government yesterday avoided commenting on its intentions, although since the intentions of the Saudi STC fund to acquire 9.9% of Telefónica's capital became known, the acting Vice President and Minister of Economy, Nadia Calviño , has always shown his concern for such a strong presence of an Arab fund in a strategic company for the country.
"From the Spanish Government we will continue to defend the strategic interest of our country and, at the same time, encourage and attract foreign investments in order to continue promoting the attraction of new technologies, innovation, growth and job creation", assured government sources . It would involve "squaring the circle", as defined by sources in the telecommunications sector.
Until yesterday, entering Telefónica was quite a challenge for the State. "They could have negotiated for STC to cede 5% that it has in derivatives through Morgan Stanley, but this would mean a disbursement of at least 1,000 million euros, according to the company's market price at Monday's close," explain analysts of the sector In this way, the Spanish Government would prevent a sovereign fund from an Arab country from entering Telefónica's board of directors and having access to sensitive information about the country's security. The financial sector does not like this possible move. "We would be setting a bad example and not helping Spanish companies, such as Telefónica, which take strong positions in international companies, as is the case with Vivo in Brazil", they warn.
It should be remembered that STC, with 4.9%, could already have access to Telefónica's core decision-making body, the board of directors. However, he has not yet asked for it and "is in no rush to do so, at the moment", say sources in the sector. These same sources do not understand much about the noise that the Saudi move has caused. "Sovereign funds are long-term investors looking for more or less guaranteed returns and without much interest in taking control of companies," they argue.
